- Analytics
- News and Tools
- Market News
- Pound could slump to parity on a hard Brexit - BNY Mellon
Pound could slump to parity on a hard Brexit - BNY Mellon
Sterling could tumble to parity with both the dollar and the euro if the U.K. crashes out of the European Union without a deal, according to Shamik Dhar, chief economist at BNY Mellon Investment Management.
“It’s pretty clear under ‘no deal’ you’ll get a very big fall in sterling -- I’d say 10% to 15% from here,” said Dhar, a former senior manager in monetary analysis at the Bank of England. “We’ll test parity against the euro, probably the dollar as well in that circumstance, and we’ll be entering a world where the central bank will be cutting rates.”
The pound has declined about 16% against the dollar since the U.K.’s referendum to leave the bloc in June 2016, with the currency swinging on every political development. It rose as much as 0.7% to the highest in two months on Thursday after Sky News reported that European Commission President Jean-Claude Juncker thought a Brexit deal can be reached by Oct. 31.
If the U.K. manages to clinch a deal to leave the bloc amicably, sterling is likely to rise about 5% from the 1.25 level, Dhar said. For those looking to trade the currency as the Oct. 31 deadline draws near, buying volatility options remains one of the best strategies, he said.
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.
Bank transfers
